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Fyre Festival

Fyre Festival was a failed "luxury music festival" founded by Billy McFarland, CEO of Fyre Media Inc, and rapper Ja Rule. It was created with the intent of promoting the company's Fyre app for booking music talent. The festival was scheduled to take place from April 28–30 and May 5–7, 2017, on the Bahamian island of Great Exuma. The event was promoted on Instagram by "social media influencers" including socialite and model Kendall Jenner, Bella Hadid, and model Emily Ratajkowski, many of whom did not initially disclose they had been paid to do so. During the Fyre Festival's inaugural weekend, the event experienced problems related to security, food, accommodation, medical services and artist relations, resulting in the festival being postponed indefinitely. Instead of the luxury villas and gourmet meals for which festival attendees paid thousands of dollars, they received prepackaged sandwiches and FEMA tents as their accommodation.

Fyre Festival was a failed "luxury music festival" founded by Billy McFarland, CEO of Fyre Media Inc, and rapper Ja Rule. It was created with the intent of promoting the company's Fyre app for booking music talent. The festival was scheduled to take place from April 28–30 and May 5–7, 2017, on the Bahamian island of Great Exuma.

The event was promoted on Instagram by "social media influencers" including socialite and model Kendall Jenner, Bella Hadid, and model Emily Ratajkowski, many of whom did not initially disclose they had been paid to do so.[1] During the Fyre Festival's inaugural weekend, the event experienced problems related to security, food, accommodation, medical services and artist relations, resulting in the festival being postponed indefinitely. Instead of the luxury villas and gourmet meals for which festival attendees paid thousands of dollars, they received prepackaged sandwiches and FEMA tents as their accommodation.[2]

As a result, the organizers are the subject of at least eight lawsuits, several seeking class action status, and one seeking more than $100 million in damages. The cases accuse the organizers of defrauding ticket buyers. On June 30, 2017, the United States Attorney for the Southern District of New York charged McFarland[1] with one count of wire fraud.[3] In March 2018, he pleaded guilty to one count of wire fraud to defraud investors and a second count to defraud a ticket vendor. On October 11, 2018, McFarland was sentenced to six years in prison and ordered to forfeit US $26 million.

Planning and organization

Billy MacFarland and Ja Rule at the 2016 Web SummitAn aircraft featuring Fyre Festival branding, used to transport attendees to the festival.

The festival was organized by Billy McFarland and Ja Rule,[2] to promote the Fyre music booking app.[1] Ja Rule had come to know McFarland through regular visits to events McFarland hosted at his previous venture, Magnises. During a flight to the Bahamas, McFarland and Ja Rule's private plane touched down on a deserted island which they later discovered was Norman's Cay, the former private island of Carlos Lehder Rivas, a kingpin of the Medellín Cartel.[6] McFarland arranged to lease the island from the current owners on the strict condition that no reference be made to the Pablo Escobar connection.[7] The island footage with the hired supermodels used for the Festival's promotional material was all shot on Norman's Cay, and planning for the festival went ahead. In early 2017, McFarland violated the terms of his contract when promotional video for the festival was released on social media advertising Norman's Cay as "once owned by Pablo Escobar"; the owners immediately cancelled the freehold.[8] A frantic search for a new island venue ensued.[citation needed]

After several small islands that seemed like likely venues were turned down, the Bahamian government gave McFarland a permit to use a site set aside for development at Roker Point (23°38′06″N75°55′08″W﻿ / ﻿23.6350115°N 75.9188489°W﻿ / 23.6350115; -75.9188489) on Great Exuma, just north of the Sandals Resort.[9] Material released on social media continued to promote the falsehood that the Festival was being hosted on Pablo Escobar's private island, with maps of the site altered to make it appear as if Roker Point was an island unto itself.[7]

On December 12, 2016, Kendall Jenner, Emily Ratajkowski and other influencers paid by Fyre, simultaneously posted to their Instagram feeds an image of an orange square with a stylized logo of flames. Clicking the logo opened a promotional video showing Bella Hadid and other models represented by her agency running around a tropical beach. Text with the video promised "an immersive music festival ... two transformative weekends ... on the boundaries of the impossible". This was the beginning of the Fyre Festival's promotional campaign.[9]

An investor, fashion executive Carola Jain, reportedly arranged for Fyre to receive a $4 million loan, which the company used most of to rent luxurious offices in Manhattan's Tribeca neighborhood. With no experience staging an event of the proposed festival's scale, McFarland began approaching companies that did, and he was reportedly taken aback when they told him the event would cost at least $5 million, perhaps even $12 million to stage in the time available as he had promised. He and his associates at Fyre believed it would cost far less, and continued with their plans under that assumption. They tried to do things themselves where possible; McFarland supposedly learned how to rent the stage by doing a Google Search.[9]

The festival's promotional material said that the festival would be held on a remote private island that once belonged to drug trafficker Pablo Escobar. Instead, workers were busy preparing Roker Point for the festival, scattering sand over its rocks and improving a road to a nearby beach, where they built some cabanas and installed swing sets.[9]

On the mainland, 5,000 tickets had been sold and an air service was hired to charter festival-goers from Miami. A medical-services company and caterer were also hired, but the latter withdrew a few weeks before the festival.[9] With only two weeks to go, a new catering service with a $1 million total budget was hired, drastically reduced from the $6 million originally allocated to provide for what was promised as "uniquely authentic island cuisine...local seafood, Bahamian-style sushi and even a pig roast".[7][13]

In March 2017, Fyre also hired a veteran event producer, Yaron Lavi, who saw that it was impossible to hold the sort of event McFarland and Ja Rule envisioned at the site. He assumed they would postpone the event to November as they had been discussing since they were not ready, but after Fyre told him they would stage the event in the spring anyway, claiming weather would ruin the event, Lavi told them to abandon plans for temporary villas and instead erect tents, the only accommodation that could be delivered in the time remaining. Lavi advised Fyre to make this clear to those who had already bought tickets, as otherwise it would be damaging to their brand. He says the company assured him that an email was being prepared, but he is not sure if it was sent.[9]

Comcast Ventures considered investing $25 million in the app, which McFarland apparently hoped would allow him to finance the festival, but declined days beforehand.[14] Reportedly, McFarland had valued Fyre Media at $90 million, and was unable to provide sufficient proof of that when Comcast requested it.[9]

Writing for New York magazine, one of the event organizers later noted that since at least mid-March there were significant problems with the planning, and at one point it was agreed to outright cancel the 2017 festival in favor of working to perfect a 2018 one.[15]

These plans, however, were revoked at the last minute with the decision to go on with the event as planned. "Let's just do it and be legends, man," one of the organizers is reported to have said.[15] Later that month, Page Six began reporting rumors that the festival organizers were too disorganized and "in over their heads."[16]

After the Comcast deal fell through, McFarland obtained some temporary financing for Fyre through investor Ezra Birnbaum that required the company repay at least US$500,000 of the loan within 16 days.[9] Around this same time, Fyre informed ticket-holders that the event would be "cashless (and cardless)," and encouraged attendees to put up to $1,500 in advance on a digital Fyre Band to cover incidentals, according to one lawsuit. Each attendee would be issued an RFID-equipped, smartwatch-like ID to use in-island.[17] This was despite advisors warning McFarland that such digital bracelets would be useless because of the poor Wi-Fi connection at the site.[7] McFarland, who signed the email, suggested that attendees upload $300–500 for every day they planned to attend. About $2 million was uploaded to these bracelets, 40% of which, according to a lawsuit later filed by Birnbaum, was used by McFarland to pay off the short-term loan.[9][18]

Festival events and attendee experiences

Early in the morning of April 27, heavy rain fell on Great Exuma which soaked the open tents and mattresses piled out in the open air for guest arrivals later that day. The first flights from Miami International Airport to Exuma International Airport, operated by Swift Air and Xtra Airways, landed at 6:20a.m.[7] That afternoon, Blink-182 announced that it was withdrawing from the festival, stating in a Twitter post that: "We're not confident that we would have what we need to give you the quality of performances we always give our fans."[7]

Initial arrivals were brought to an "impromptu beach party" at a beachside restaurant, where they were plied with alcohol and kept waiting for around six hours while frantic preparations at the festival site continued.[7] Later arrivals were brought directly to the grounds where the true state of the festival's site became apparent. Festival-goers were dropped off at the production bungalow where McFarland and his team were based so they could be registered, but after hours of long lines the process broke down and turned into a free-for-all as people rushed to claim their own tents.[7] Around nightfall, a group of local musicians took to the stage and played for a few hours, the only act to perform at the event. In the early morning, it was announced that the festival would be postponed and that the attendees would be returned to Miami as soon as possible.

Reports from the festival emerged of various problems, including the mishandling or theft of guests' baggage, scattered disaster relief tents with dirt floors, some with mattresses that were soaking wet, a lack of housing assignments causing guests to leave with no place to sleep, an unfinished gravel lot, a lack of medical personnel or event staff, no cell phone or internet service, portable toilets,[19] no running water, inadequate and poor quality food (including cheese sandwiches served in foam containers),[20][21] and heavy-handed security.

Many attendees were reportedly stranded, as flights to and from the island were cancelled after a government order that barred any more planes from landing.[22][2]

The first flight back to Miami boarded at 1:30a.m. on April 28, but was delayed for hours due to issues with the flight's manifest. It was cancelled after sunrise and passengers were locked in the Exuma Airport terminal with no access to food or water[23] and no air conditioning; a passenger recalled that at least one person passed out from the heat and had to be hospitalized.[9]

The flight eventually left Exuma that morning, and more charter flights to Miami departed from Exuma throughout the day.

Involved parties

Organizers

With $3.1 million in venture capital to date and 25 employees, McFarland also founded a card company called Magnises in 2013,[24] which promised members paying an annual $250 fee that they could "unlock their cities and take their lives to the next level", including "private members-only concerts, tastings with notable chefs, and exclusive art previews at top galleries". The Washington Post reported that "some of those benefits never materialized or were far from what was advertised".[25] "They send the same email for every problem, but it's like fill-in-the-blanks for what the problem is", a member reported to Business Insider.[26] Magnises reportedly became profitable in 2015.[26]

The Washington Post also reported that McFarland "has a history of overpromising" in his previous business ventures, and cited multiple examples. One being that after McFarland sold VIP tickets to the musical Hamilton for $430, the tickets were cancelled at the last minute. In a complaint to the Better Business Bureau, one customer seeking a refund reported getting no response to multiple queries over a month and a half.[25]

Hadid has acknowledged and apologized for participating in the promotion.[30] Baldwin revealed that she donated her entire payment to charity after seeing the aftermath of the event.[31]

Aftermath

Ja Rule posted a note on Twitter that said "it was NOT A SCAM" and "this is NOT MY FAULT".[32]

Fyre Festival posted a statement on their website:

Fyre Festival set out to provide a once-in-a-lifetime musical experience on the Islands of the Exumas. Due to circumstances out of our control, the physical infrastructure was not in place on time and we are unable to fulfill on that vision safely and enjoyably for our guests. At this time, we are working tirelessly to get flights scheduled and get everyone off of Great Exuma and home safely as quickly as we can. We ask that guests currently on-island do not make their own arrangements to get to the airport as we are coordinating those plans. We are working to place everyone on complimentary charters back to Miami today; this process has commenced and the safety and comfort of our guests is our top priority. The festival is being postponed until we can further assess if and when we are able to create the high-quality experience we envisioned. We ask for everyone's patience and cooperation during this difficult time as we work as quickly and safely as we can to remedy this unforeseeable situation. We will continue to provide regular updates via email to our guests and via our official social media channels as they become available.[33]

Fyre Festival announced that it would offer all attendees a choice between a full refund or VIP tickets to the following year's festival.[39][40]

Lawsuits

As a result of the festival, McFarland and Ja Rule are the subject of a $100 million lawsuit in the state of California. It was filed on behalf of plaintiff Daniel Jung by entertainment lawyer Mark Geragos, who is seeking class action status for the lawsuit with more than 150 plaintiffs.[41] Per the filing, Jung's lawsuit alleges fraud, breach of contract (part of this was the decision from organizers to go cashless so no one had money for taxis), breach of covenant of good faith (part of this was due to the "cheese sandwich" meme and the airport incident) and negligent misrepresentation.[42] Ben Meiselas of Geragos's firm pledged to hold "all those who recklessly and blindly promoted the festival" accountable, which was interpreted as being directed at Jenner, Hadid, and other social media influencers.[43] A Geragos lawyer stated Fyre Festival sent cease and desist letters to whistleblowers.[44]

A second class action lawsuit against Fyre Media, McFarland, Ja Rule, and the event promoters identified as "Does 1-100" was filed in Los Angeles by personal injury lawyer John Girardi on behalf of three attendees.[45] The plaintiff alleges that they deceived patrons into attending the festival by paying more than 400 social media personalities and celebrities to promote it. The parties are accused of breach of contract, negligent misrepresentation, and fraud.[46] A Bloomberg reporter filed a FOIA request to the FTC regarding their Instagram knowledge, after the second class action lawsuit zinged[clarification needed] the event promoters.[45]

A third lawsuit was filed in New York federal court against Ja Rule, McFarland, Fyre Media, and chief marketing officer Grant Margolin. Plaintiffs Matthew Herlihy and Anthony Lauriello accused the festival organizers of "false representations, material omissions... negligence, fraud, and violations of consumer protection statutes."[47] "Upon the arrival of guests to the island of Great Exuma for the first weekend, the island was lacking basic amenities, was covered in dirt, and guests had to sleep in tents with wet blankets," the suit claims. "There were no communal showers or bathrooms as promised; instead there were porta potties (only about one for every 200 yards) that were knocked down and only three showers although there were hundreds of people arriving."

On May 4, another lawsuit was filed by National Event Services (NES), which provided medical services for the festival and claimed to have suffered $250,000 in damages, alleging breach of contract, fraud, and negligence by the organizers. The suit alleged that Fyre "failed and/or refused" to buy cancellation insurance and "failed to secure a contract with a medical evacuation helicopter or plane." NES employees reported that the local medical clinic was closed and the accommodation was "uninhabitable," with "bug infestation, bloodstained mattresses, and no air conditioning."

Also in May, festival attendee Andrew Petrozziello filed a lawsuit in New Jersey federal court alleging that the organizers violated the state's consumer fraud act and committed breach of contract.[48]

A sixth lawsuit, filed in Florida federal court as a class action suit, alleged violations that include fraud, negligence, and breach of contract. The plaintiffs, Kenneth and Emily Reel, accused the organizers of sending cease and desist letters to people who criticized the festival on social media.[49]

A seventh lawsuit was filed in Manhattan federal court as a class action suit on behalf of Sean Daly and Edward Ivey. In addition to the infractions mentioned in the other lawsuits, this suit alleges unjust enrichment and violation of New York state business law, claiming that the organizers continued to offer VIP upgrades and opportunities to deposit money into the "Fyre Band" payment system after the festival had been canceled.[50]

An eighth lawsuit was filed in Suffolk County Superior Court in Boston on behalf of ticketing vendor Tablelist. The company is alleging that the festival organizers and financial backers committed breach of contract and fraudulently deceived Tablelist and ticket purchasers. Tablelist is seeking $3.5 million to refund customers, as well as damages resulting from loss of business after being forced to lay off 40% of their workforce to focus on the litigation.[51]

On July 3, 2018, two North Carolina attendees were granted $5 million in damages. One of them, a blogger whose live-tweeting of the festival received heavy media coverage, declared he purchased the Fyre Festival trademark following its abandonment by the original organizers.[52]

On March 6, 2018, McFarland pleaded guilty to one count wire fraud in what the U.S. Justice Department called a scheme to defraud investors, as well as a second count of wire fraud related to a scheme to defraud a ticket vendor. McFarland was ordered to repay $26 million to investors.[54][55]

On July 24, 2018, the Securities and Exchange Commission (SEC) announced that McFarland, two companies he founded, a former senior executive, and a former contractor agreed to settle charges arising out of an extensive, multi-year offering fraud that raised at least $27.4 million from over 100 investors. McFarland admitted to the SEC's allegations against him, agreed to a permanent director-and-officer bar, and agreed to disgorgement of $27.4 million. Grant H. Margolin, Daniel Simon, Fyre Media, and Magnises, Inc. agreed to the settlement without admitting or denying the charges. Margolin has agreed to a seven-year director-and-officer bar and must pay a $35,000 penalty, and Simon has agreed to a three-year director-and-officer bar and must pay over $15,000 in disgorgement and penalty. The settlements are subject to court approval.[56]

Films

In 2019, two documentary films were released that covered the Fyre Festival and McFarland.

Fyre Fraud, an American documentary film directed by Jenner Furst and Julia Willoughby Nason, premiered on January 14, 2019, on Hulu. Fyre Fraud is described as a "true-crime comedy bolstered by a cast of whistleblowers, victims, and insiders going beyond the spectacle to uncover the power of FOMO and an ecosystem of enablers, driven by profit and a lack of accountability in the digital age."[58] The film was met with a positive response from critics upon its premiere. On the review aggregation website Rotten Tomatoes, the series holds a 73% approval rating with an average rating of 6 out of 10 based on 22 reviews. The website's critical consensus reads, "In the battle over Fyre Festival content, Fyre Fraud comes out swinging with a questionable interview of conman Billy McFarland and a thoughtful exploration of nefarious social strategy."[59]Metacritic, which uses a weighted average, assigned the film a score of 66 out of 100 based on 12 critics, indicating "generally favorable reviews."[60]

On January 18, 2019, Netflix released the film Fyre. Directed by Chris Smith, the film features interviews with event organizers and festival attendees. Like Fyre Fraud, the film received positive reviews. On Rotten Tomatoes, the film holds a 92% rating, with an average rating of 7.7 out of 10, based on 60 reviews.[61] On Metacritic, the film holds a score of 76 based on 25 critical reviews.[62]